for the 5k balance Q, dont forget that financially responsible people are more are less likely to jump into a big purchase (such as a car) unprepared, I will use my latest car loan as an example: in May 2006, we decide to upgrade my wife's car, so we opened what we called a car saving acct, by Dec 06 we had 9k ready in it for the car down payment. the car we chose, had a price tag of 22k(being financially consrervitive also means no crazy 50k suv for us), so we put down the 9k and after taxes and all we had to finance about 15k, next was the payments: by the time this loan hit my credit report( took 2 months) I already paid down the balance to 13k, now 12 months later, the balance is indeed under 5k, so the way I see it, high FICO is another factor in being financially responsible and theirfore not jumping into big debts if you can avoid it.

mkatan wrote:for the 5k balance Q, dont forget that financially responsible people are more are less likely to jump into a big purchase (such as a car) unprepared, I will use my latest car loan as an example: in May 2006, we decide to upgrade my wife's car, so we opened what we called a car saving acct, by Dec 06 we had 9k ready in it for the car down payment. the car we chose, had a price tag of 22k(being financially consrervitive also means no crazy 50k suv for us), so we put down the 9k and after taxes and all we had to finance about 15k, next was the payments: by the time this loan hit my credit report( took 2 months) I already paid down the balance to 13k, now 12 months later, the balance is indeed under 5k, so the way I see it, high FICO is another factor in being financially responsible and theirfore not jumping into big debts if you can avoid it.

Message Edited by mkatan on 01-06-200806:04 AM

I bought a new car December 2006 for c. 25K now 1 year later the loan is down to 11K. I have gotten 0 FICO points for it.

I bought a new car December 2006 for c. 25K now 1 year later the loan is down to 11K. I have gotten 0 FICO points for it.

It's results like this that make it apparent how little weight installment and mortgage loans carry in scoring. They do count, but you sure don't get the swings in score changes that you do with revolving.

I wonder if that is because they are secured loans. It is also interesting to me that if you max a CC out, you get a score hit but FICO has no interest that a ARM mortgage that goes up

I'm sure that you're right. FICO rewards highly-disciplined management of risk, and there is a lot more risk represented by credit cards than car loans and mortgages. No one wants to look out the window at midnight and see their car on the hook, vanishing down the street. Of course, now you read about people walking away from their mortgages, because they're homes have lost so much value that they are seriously upside-down.

This is also why it's so upsetting for HELOC holders like MV, whose credit limit isn't high enough to get EX to treat it as a mortgage. Even if the limit is "only" $25K, it's still secured by his home, and presumably MV and Mrs. MV would do whatever it took to keep the dining room and new roof from being repo'd.

I bought a new car December 2006 for c. 25K now 1 year later the loan is down to 11K. I have gotten 0 FICO points for it.

It's results like this that make it apparent how little weight installment and mortgage loans carry in scoring. They do count, but you sure don't get the swings in score changes that you do with revolving.

I liken FICO to a man's lot in marriage. You don't get much credit for doing the right things but screw up and oh boy.

smallfry wrote:I bought a new car December 2006 for c. 25K now 1 year later the loan is down to 11K. I have gotten 0 FICO points for it.

It's results like this that make it apparent how little weight installment and mortgage loans carry in scoring. They do count, but you sure don't get the swings in score changes that you do with revolving.

I liken FICO to a man's lot in marriage. You don't get much credit for doing the right things but screw up and oh boy.

I bought a new car December 2006 for c. 25K now 1 year later the loan is down to 11K. I have gotten 0 FICO points for it.

It's results like this that make it apparent how little weight installment and mortgage loans carry in scoring. They do count, but you sure don't get the swings in score changes that you do with revolving.

I liken FICO to a man's lot in marriage. You don't get much credit for doing the right things but screw up and oh boy.

mkatan: I was questioning the 1.2k, not the 5k. I would be shocked if the 1.2k has been true for quite awhile, especially with all the recent inflation!!

Re installment loans: the recent housing loan probs make me wonder if installment loans will be come more predictive in the future, especially with exotic loans, and therefore weighted more heavily in future formulas. A glimpse of "FICO2012"???

Recent Ficos 815+I do not do business with crooked companies.crap1, United Airlines, Home Depot, Volvo will never make a dime from me.

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IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.